SEC Filing | Rain Oncology Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

rain-10q_20210930.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number: 001-40356

Rain Therapeutics Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	82-1130967
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8000 Jarvis Avenue, Suite 204 Newark, CA	94560
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 953-5559

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

RAIN

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 3, 2021, the registrant had 26,466,746 shares of common stock, $0.001 par value per share, outstanding, comprised of 18,739,276 shares of common stock, $0.001 par value per share and 7,727,470 shares of non-voting common stock, $0.001 par value per share.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	1
	Condensed Statements of Operations and Comprehensive Loss (Unaudited) for the three and nine months ended September 30, 2021 and 2020	2
	Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited) for the three and nine months ended September 30, 2021 and 2020	3
	Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2021 and 2020	4
	Notes to Unaudited Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Rain Therapeutics Inc.

Condensed Balance Sheets

(In thousands)

	September 30,			December 31,
	2021			2020⁽¹⁾
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	13,258		$	58,863
Short-term investments		136,823			—
Prepaid and other current assets		7,325			662
Total current assets		157,406			59,525
Property and equipment, net		178			99
Operating lease right-of-use asset		416			447
Deferred offering costs		—			385
Other assets		531			624
Total assets	$	158,531		$	61,080
Liabilities, convertible preferred stock, and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	3,678		$	816
Accrued research and development		5,362			1,527
Other accrued liabilities		1,706			935
Operating lease liability, current portion		158			141
Total current liabilities		10,904			3,419
Operating lease liability, net of current portion		284			312
Other long-term liabilities		68			69
Total liabilities		11,256			3,800
Commitments and contingencies
Series A convertible preferred stock, $0.001 par value; no shares and 3,731,208 shares authorized, issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		—			20,147
Series B convertible preferred stock, $0.001 par value; no shares and 12,542,198 shares authorized, issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		—			74,550
Total convertible preferred stock		—			94,697
Stockholders' equity (deficit):
Common Stock, $0.001 par value; 250,000,000 and 24,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 26,466,746 shares (comprised of 18,739,276 shares of common stock and 7,727,470 shares of non-voting common stock) and 3,530,975 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		27			4
Additional paid-in capital		219,222			1,149
Accumulated other comprehensive income		5			—
Accumulated deficit		(71,979	)		(38,570	)
Total stockholders' equity (deficit)		147,275			(37,417	)
Total liabilities, convertible preferred stock, and stockholders' equity (deficit)	$	158,531		$	61,080

(1)	The balance sheet at December 31, 2020 has been derived from the audited financial statements included in Rain Therapeutics Inc.’s final prospectus for its initial public offering filed on April 23, 2021.

See accompanying notes to financial statements.

Table of Contents

Rain Therapeutics Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	15,284		$	7,893		$	26,101		$	11,195
General and administrative		3,154			591			7,334			2,311
Total operating expenses		18,438			8,484			33,435			13,506
Loss from operations		(18,438	)		(8,484	)		(33,435	)		(13,506	)
Other income (expense):
Interest income		11			—			25			23
Interest expense, related party		—			(71	)		—			(135	)
Change in fair value of convertible promissory notes, related party		—			(1,891	)		—			(2,024	)
Other income		1			—			1			2
Total other income (expense), net		12			(1,962	)		26			(2,134	)
Net loss	$	(18,426	)	$	(10,446	)	$	(33,409	)	$	(15,640	)
Other comprehensive income:
Unrealized gain on investments	$	5			—		$	5			—
Comprehensive loss	$	(18,421	)	$	(10,446	)	$	(33,404	)	$	(15,640	)

Net loss per share, basic and diluted	$	(0.70	)	$	(3.05	)	$	(1.96	)	$	(4.73	)
Weighted-average shares used to compute net loss per share, basic and diluted		26,466,746			3,422,458			17,025,032			3,307,932

See accompanying notes to financial statements.

Table of Contents

Rain Therapeutics Inc.

Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

(unaudited)

	Series A						Series B
	Convertible Preferred Stock						Convertible Preferred Stock						Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive		Total Stockholders'
	Shares			Amount			Shares			Amount			Shares		Amount		Capital		Deficit			Income		Equity (Deficit)
Balance as of December 31, 2020		3,731,208		$	20,147			12,542,198		$	74,550			3,530,975	$	4	$	1,149	$	(38,570	)	$	—	$	(37,417	)
Stock-based compensation expense		—			—			—			—			—		—		165		—			—	$	165
Net loss		—			—			—			—			—		—		—		(6,800	)		—	$	(6,800	)
Balance as of March 31, 2021		3,731,208		$	20,147			12,542,198		$	74,550			3,530,975	$	4	$	1,314	$	(45,370	)	$	—	$	(44,052	)
Conversion of convertible preferred stock to common stock		(3,731,208	)		(20,147	)		(12,542,198	)		(74,550	)		15,069,330		15		94,682		—			—		94,697
Issuance of common stock upon IPO, net of issuance cost		—			—			—			—			7,845,011		8		121,486		—			—	$	121,494
Exercise of stock options		—			—			—			—			21,430		—		85		—			—	$	85
Stock-based compensation expense		—			—			—			—			—		—		793		—			—	$	793
Net loss		—			—			—			—			—		—		—		(8,183	)		—	$	(8,183	)
Balance as of June 30, 2021		—		$	—			—		$	—			26,466,746	$	27	$	218,360	$	(53,553	)	$	—	$	164,834
Stock-based compensation expense		—			—			—			—			—		—		862		—			—	$	862
Unrealized gain on investments		—			—			—			—			—		—		—		—			5	$	5
Net loss		—			—			—			—			—		—		—		(18,426	)		—	$	(18,426	)
Balance as of September 30, 2021		—		$	—			—		$	—			26,466,746	$	27	$	219,222	$	(71,979	)	$	5	$	147,275

	Series A				Series B
	Convertible Preferred Stock				Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive		Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income		Deficit
Balance as of December 31, 2019		3,731,208	$	20,147		—	$	—		2,986,385	$	3	$	236	$	(17,487	)	$	—	$	(17,248	)
Vesting of restricted shares		—		—		—		—		289,377		1		—		—			—		1
Stock-based compensation expense		—		—		—		—		—		—		199		—			—		199
Net loss		—		—		—		—		—		—		—		(2,569	)		—		(2,569	)
Balance as of March 31, 2020		3,731,208	$	20,147		—	$	—		3,275,762	$	4	$	435	$	(20,056	)	$	—	$	(19,617	)
Vesting of restricted shares		—		—		—		—		135,048		—		—		—			—		—
Stock-based compensation expense		—		—		—		—		—		—		196		—			—		196
Net loss		—		—		—		—		—		—		—		(2,624	)		—		(2,624	)
Balance as of June 30, 2020		3,731,208	$	20,147		—	$	—		3,410,810	$	4	$	631	$	(22,680	)	$	—	$	(22,045	)
Issuance of Series B convertible preferred stock, net of issuance costs of $320